IN THE SUPREME COURT OF BRITISH COLUMBIA
Citation: | Klein Lyons v. Aduna, |
| 2013 BCSC 1931 |
Date: 20131023
Docket: S115012
Registry:
Vancouver
Between:
Klein Lyons
Solicitors
And
Tito C. Aduna
Client
Before:
Registrar Sainty
Reasons for Judgment
Counsel for the Solicitors: | J.Z. Murray |
Appearing on his own behalf | Tito C. Aduna |
Place and Date of Hearing: | Vancouver, B.C. January 7-10 & |
Place and Date of Judgment: | Vancouver, B.C. October 23, 2013 |
BACKGROUND
[1]
Mr. Aduna was injured in a motor vehicle accident on July 13, 2005
(the Accident). The Accident was witnessed by Mr. Bojan Petrovic, a
case manager with Klein Lyons, Barristers and Solicitors (and the solicitors in
this action). Mr. Petrovic approached Mr. Aduna at the scene of the
Accident, gave him his card and advised that he was prepared to be a witness on
Mr. Adunas behalf regarding the circumstances of the accident should the
need arise.
[2]
Mr. Aduna (the Client) retained Klein, Lyons (the Law Firm) as
his solicitors in respect of the Accident and signed a contingency fee
agreement with that firm on July 20, 2005 (the CFA). The Law Firm commenced
an action on Mr. Adunas behalf (Aduna v. Agopian, BCSC, Vancouver
Registry, Action No. M072962 (the Action)).
[3]
Mr. Adunas matter was initially handled by Mr. Osborne. Mr. Osborne
left the Law Firm in January 2009. Mr. Aduna was given the option of
remaining with the Law Firm or transferring his file to Mr. Osbornes new
firm. He chose to stay with Klein Lyons and Mr. Lyons was assigned to
handle his matter but shortly after thereafter, the Clients matter was
assigned to Mr. Hallen. At all times throughout the retainer, Mr. Petrovic
was the case manager assigned to the file. Mr. Petrovic received a law
degree in his home country of Yugoslavia (from the University of Belgrade). He
immigrated to Canada in 1994. He has apparently worked as a case manager for
the Law Firm for some 11 and a half years.
[4]
The Law Firm acted for Mr. Aduna until April 2011. The Action
was settled at mediation on April 21, 2011 for the sum of $334,734, inclusive
of costs and disbursements.
[5]
On April 28, 2011, the Law Firm sent the Client a bill pursuant to the
CFA. That bill was for a total of $111,139.17 made up of fees of $75,000,
taxable disbursements totalling $24,555.83 (before tax) and non-taxable
disbursements of $939.50 (the Initial Bill). The fee amount was calculated
at 25% of $300,000; the amount Mr. Hallen said Mr. Aduna received in
damages from the defendant in the Action; the balance ($34,734) of the
settlement funds represented Mr. Adunas costs and disbursements of the
Action.
THE REVIEW
[6]
In July 2011, Mr. Aduna commenced this proceeding by filing an
appointment for:
(a) assessment of the bill
of costs of Klein Lyons, ArcPrint and Imaging and Paul Taberner[1];
(b) review of the bill of
Klein Lyons; and
(c) examination of the
agreement between Klein Lyons and Tito C. Aduna.
[7]
The original appointment gave a time estimate of one day for the matter.
At a pre-hearing conference held August 23, 2011, it was determined that four
days would be needed for hearing. The matter was then set for October 2012 but
again adjourned. The hearing commenced before me on January 7, 2013. I heard
four days of evidence (January 7 – 10) and then, as the matter was not
completed, there were three additional days of hearing over the next several
months. The parties completed their submissions on May 3, 2013.
[8]
On July 15, 2013, I issued my reasons related to my examination of the
CFA (see Klein Lyons v. Aduna, 2013 BCSC 1250) as I felt that before I
could review the Law Firms Initial Bill to Mr. Aduna (including the
disbursements), I must first decide the fairness and reasonableness of the CFA
(per s.68 of the Legal Profession Act, S.B.C. 1998, C.9 (the Act)).
In that decision, I set aside the CFA on the basis that it was unfair. I then
cancelled the CFA as I was of the view that there was no modification of it
which would render it fair.
[9]
In Kelly v. McMillan, 2003 BCSC 307, Goepel J. decided that
if a fee agreement is cancelled or modified on its review under s.68 of the Act,
the registrar has no jurisdiction to proceed with a fee review in the absence
of a bill from the lawyers that is capable of being reviewed by her.
[10]
As I was aware of the decision in Kelly v. McMillan, during the
hearing, I asked Mr. Murray (who represented the Law Firm before me) what
"bill" the Law Firm intended to rely on if I reached the conclusion
that the CFA was unfair or unreasonable. Mr. Murray advised that,
regardless of what decision I made, the Law Firm intended to seek fees of
$75,000 from the Client and thus would not render a new bill if I cancelled the
CFA but would simply ask that I review the Initial Bill of April 28, 2011 as their
quantum meruit bill to Mr. Aduna.
[11]
In my reasons, I noted that, although I was of the view that I could
simply review the Initial Bill (as the Law Firm had suggested), as the costs of
a review of a lawyers bill depend upon the amount of the bill being reviewed
(see s. 72 of the Act), I wished to give the Law Firm an opportunity to
replace the Initial Bill with another bill for my review on a quantum meruit
basis. I therefore gave the Law Firm 30 days from the date of my reasons to
issue a new bill to Mr. Aduna (considering s. 71 of the Act). I
also allowed the parties 30 further days in which to apply to make additional
submissions regarding the reasonableness of any new bill issued.
[12]
On August 13, 2013, I was provided with a copy of new bill (the Final
Bill) rendered by the Law Firm to the Client in connection with their
representation of the Client in the Action. That Final Bill is for the sum of
$93,318.48: $60,000 in fees; taxable disbursements of $23,599.18; $939.50 in
non-taxable disbursements; and taxes of $8,779.80.
[13]
I have received no requests from either the Law Firm or the Client to
make additional submissions on that Final Bill and thus will now review that
Bill considering the evidence and submissions made to me at the hearing.
THE LAW
[14]
As the CFA was cancelled, there is no contract between the Law Firm and
the Client setting out the manner in which the Law Firms fees might be
charged. Therefore, I must decide, on a quantum meruit basis, what
amount Mr. Aduna ought to pay the Law Firm for their work on his behalf.
[15]
A quantum meruit assessment is one which determines the reasonable
sum of money which ought to be paid for services rendered when the amount for
such services is not stipulated in a legally enforceable contract.
[16]
A quantum meruit assessment of a lawyers bill is governed by the
provisions of s. 71 of the Act which provide that, on a review of a
lawyers bill, a registrar must allow a lawyer those fees, charges and
disbursements that were necessary and proper to conduct the proceeding to which
they relate (s.71(2)(a)). And, in making her decision a registrar must
consider all of the circumstances including (s.71(4)):
(a) the
complexity, difficulty or novelty of the issues involved,
(b) the
skill, specialized knowledge and responsibility required of the lawyer,
(c) the
lawyer’s character and standing in the profession,
(d) the
amount involved,
(e) the
time reasonably spent,
(f) if
there has been an agreement that sets a fee rate that is based on an amount per
unit of time spent by the lawyer, whether the rate was reasonable,
(g) the
importance of the matter to the client whose bill is being reviewed, and
(h) the result obtained.
THE DISBURSEMENTS
[17]
I will start by considering the disbursements. Mr. Adunas
appointment specifically took issue with the disbursements billed by ArcPrint
and Imaging and those rendered to the law firm by Paul Taberner.
[18]
At the hearing when I asked Mr. Aduna to enumerate any other
disbursements with which he had issues, he said that he disputes all of the
following items (listed on the Initial Bill):
TAXABLE DISBURSEMENTS
Copying $3,213.21
Medical Report – Dr. Patrick Yam $852.00
PharmaNet File – College of
Pharmacists $200.00
Medical Legal Opinion – Cecil
Hershler $2,400.00
Arcprint and Imaging – Out-of-house
Photocopying $61.30
Medical Report – Dr. Griffin $2,338.00
Black & white copy/Arcprint and
Imaging Ltd. $959.63
Cancellation Fee – Paul D. Taberner $337.50
Arcprint and Imaging Ltd. – Out-of
House Photocopying $956.65
Medical Report – Dr. Stephen D.
Anderson $4,095.00
Medical/Legal Occupational Therapy $5,012.50
Copies – Arcprint and Imaging Ltd. $164.42
Overdue Invoices – Arcprint and
Imaging Ltd. $212.58
XFD Transcript – Coast Reporting
Services Inc. $305.03
XFD Transcript – Coast Reporting
Services Inc. $175.49
XFD Transcript – Coast Reporting
Services Inc. $252.23
Services Rendered – PETA Consultants
(Vancouver) Ltd. $2,542.05
Total
Taxable Disbursements $24,077.59
NON-TAXABLE DISBURSEMENTS
Filing Fee Court Costs / Dye and
Durham $416.00
Filed Notice of Trial $208.00
Filed Req to reset Trial $200.00
Interest on disbursements ($3,944.99)
written off $0.00
Total Non-Taxable Disbursements $824.00
[19]
During the hearing, Mr. Aduna told me that he also disputed all of
the taxes charged on the fees and disbursements as he did not believe that lawyers
charge taxes on services and thus no PST (at least) ought to be payable. I
pointed out to Mr. Aduna that he was in error and that certainly the fees
and some of the disbursements were taxable and that he would be responsible to
pay tax on all of the fees and such of the disbursements that are taxable that
I allow in this review.
[20]
On cross-examination of Mr. Hallen, it became clear that there was likely
an error in the Initial Bill insofar as it related to the Arcprint and Imaging
Ltd. accounts. When the Final Bill was provided, the sum of $956.65 had been
removed from that Bill representing an overcharge in relation to the Arcprint
and Imaging Ltd. disbursements accounts included in the Initial Bill. The
amount of disbursements in issue is therefore reduced by that amount.
[21]
During his testimony, Mr. Hallen indicated that, when he prepared
the Initial Bill he did so on the premise that the Client received $300,000 in
damages for his injuries and $34,734 towards his costs and disbursements when
the matter settled at mediation. Mr. Hallen prepared a draft bill of
costs before the mediation which he used for the purposes of negotiation at the
mediation. That draft bill of costs indicates that Mr. Hallen was seeking
total costs on the Clients behalf of $41,400.68 consisting of 85 units under
the tariff, some $24,417.01 in taxable and $4,884.49 in non-taxable disbursements,
and tax on the units and taxable disbursements.
[22]
In his testimony, Mr. Hallen confirmed that, based on the notes he
made on the draft bill of costs at the mediation, the end result was that Mr.
Aduna received 72 units for his costs which, at $110 a unit, results in $8,870.40
of tariff costs (72 x $110 per unit = $7,920 plus tax at 12%[2]
($950.40) = $8,870.40).
[23]
As for the disbursements, Mr. Hallen testified that the defendant
in the Action did not take particular issue with the list of disbursements contained
in the bill of costs, with the exception of the claim for the interest on the
disbursements (of $3,994.99) and some other small amounts such as the $10 trust
administration fee. Mr. Hallen recollected that the defendant contributed
some $25,863.69 towards the disbursements (compared to claimed disbursements of
$29,301.50) resulting in total costs paid of $34,734. According to Mr. Hallen,
the costs and disbursements were not hard fought at the mediation once opposing
counsel came to the realisation that it might be possible to settle the Action
and conclude it on the day of the mediation.
[24]
I pointed out to Mr. Aduna during the hearing that it was likely he
had received, as part of his settlement, close to full indemnity from the
defendant in the Action for the disbursements billed and that to reduce them as
he submitted would result in a windfall to him. Mr. Aduna insisted that
he should only pay for those disbursements necessarily or properly incurred and
maintained that many of the disbursements he challenged were neither necessary
nor proper.
[25]
Clearly counsel for the defendants in the Action felt that the
disbursements (or most of them) were necessary and or proper or they would not
have agreed to pay them. Mr. Hallen and Mr. Petrovic both reviewed
the disbursements in their testimony. It was through their testimony that the
error in the way the Arcprint and Imaging invoices were recorded was discovered.
When it was discovered and confirmed, the Law Firm admitted their error and
agreed to reimburse Mr. Aduna the full amount mistakenly charged to him. On
the Final Bill an adjustment was made for the mistake. I should also note that
on both the Initial Bill and the Final Bill the interest on disbursements
(shown as accrued at $3,944.99) is noted as written off.
[26]
I wish to point out that Mr. Aduna received compensation from the
defendant in the Action for 99 percent of the amount charged to him by the Law
Firm for disbursements related to the Action. I do not feel it would be
appropriate for Mr. Aduna to garner a windfall from the Law Firm if I were
to reduce the disbursements payable by him with the result then that the Law
Firm would absorb the costs of disbursements which have been reimbursed by the
defendant. It is not appropriate that Mr. Aduna make a profit on those
disbursements at the solicitors expense.
[27]
Regardless, the amount claimed on the Final Bill for disbursements is
$26,118.48 made up of $23,599.18 in taxable disbursements (plus tax of
$1,579.80 on that amount) and non-taxable disbursements of $939.50. I carefully
reviewed all of the disbursements. I am satisfied that each one was
appropriately incurred in the prosecution of the Action. Further, I am
satisfied that the amounts charged to Mr. Aduna by the Law Firm for these
disbursements are reasonable in the circumstances. I would make no adjustment
to those amounts.
[28]
Accordingly, I will uphold, in full, the disbursements sought on the
Final Bill in the amount of $26,118.48.
THE FEES
[29]
I turn now to the fees themselves.
[30]
Mr. Aduna had a number of complaints about the lawyers conduct and
work. I do not intend to list each and every one of Mr. Adunas complaints
individually. As much as I am able, I intend to deal with Mr. Adunas
criticisms in a global fashion. In preparing these reasons I reviewed all of
my notes of the evidence adduced and the submissions made by both the Client
and the Law Firm. The fact that I do not enumerate a specific complaint in
these reasons should not be taken as an indication that I have not reviewed or considered
it.
[31]
The majority of Mr. Adunas complaints about the Law Firms work stem
from the fact that, in Mr. Adunas view, the settlement achieved was far,
far too low considering the nature of his injuries. More specifically, Mr. Aduna
felt that the Law Firm failed him by:
a)
Not achieving a seven digit (more than $1 million) settlement on his
behalf;
b)
Not hiring an economist much earlier on in the litigation to provide a
report on the income losses he suffered as a result of the Accident;
c)
Practising a bait and switch on him: baiting him to stay at the Law
Firm when Mr. Osborne left by offering him Mr. Lyons as his counsel but
then, after he had agreed to remain with the Law Firm (and not follow Mr. Osborne),
switching him to Mr. Hallen, a much less experienced lawyer than Mr. Lyons;
d)
Forcing him to agree to an improvident settlement at the mediation by
Mr. Hallens threats, if he did not agree to the settlement, to:
1.
withdraw;
2.
take his motor vehicle as security for their legal fees; and
3.
have him declared incompetent (by appointing his wife as his committee
or litigation guardian in the action).
[32]
The Law Firm submits that they achieved a very favourable result in the
litigation for a client who had suffered significant (but not catastrophic)
injuries from the Accident; a client who had sporadic pre-accident income and
thus difficulties proving significant wage losses (past and future). Mr. Murray
says that the Law Firm appropriately prosecuted Mr. Adunas case. They
retained several experts, including five psychiatrists and an economist all of
whom gave reports that bolstered Mr. Adunas case; they attended three
examinations for discovery two of Mr. Aduna and one of the defendant;
they collected, sorted and listed a myriad of documents; and, on the clients
instructions, settled the matter at mediation and avoided the danger of a costs
award against the client in the face of a significant ($200,000) formal offer
to settle.
A. The complexity difficulty or novelty of the matter
[33]
Mr. Aduna submitted that this was not a very complex case. There
was no issue with liability as Mr. Petrovic witnessed the Accident and
could testify to the circumstances of it. In fact Mr. Aduna said the
matter was so simple; so straightforward that it was given to a bait and
switch junior lawyer to handle.
[34]
Mr. Murray agreed that Mr. Petrovics having witnessed the
Accident did certainly mean that liability was not likely to be seriously
contended. However, he did say that Mr. Adunas injuries were not, at
all, straightforward: he was suffering from post-traumatic stress disorder; he
had a major depressive disorder; and a number of physical injuries. Nor, says
Mr. Murray was Mr. Adunas claim for loss of income and loss of
earning capacity simple or straightforward. Further, Mr. Aduna, himself,
was not a particularly easy client to deal with. His expectation (that his
case was worth seven figures and that he needed at least an offer with at least
seven figures in it to consider settling) made the matter more complex and
difficult. These issues combined to make the matter of at least moderate
complexity.
[35]
I agree with Mr. Murrays submissions. This case was not simple or
straightforward. The clients injuries were complex. Proving his past and
future income losses and loss of earning capacity would require careful
analysis of his many documents. Mr. Adunas unrealistic expectation of a
seven figure damage award needed to be managed and is, in and of itself, an
indication that this matter was not clear cut and not likely to be easily
resolved.
B. The skill, specialised knowledge and responsibility required
[36]
I was told that Mr. Osborne (who initially had conduct of this
matter) is a lawyer called to the bar of British Columbia in 1992. I do not
believe that Mr. Aduna took any issue with Mr. Osbornes
qualifications or with the work done by him.
[37]
Mr. Lyons was also called to the BC Bar in 1992 and has practised
in the area of personal injury law for most of his career. Mr. Aduna took
no issue with Mr. Lyonss qualifications or work (although Mr. Lyons
did very little on this file).
[38]
Countless times during the hearing and in his submissions, Mr. Aduna
complained about Mr. Hallen and the manner in which Mr. Hallen
conducted this matter. As noted earlier, Mr. Aduna submitted that the Law
Firm employed a bait and switch tactic to induce him to remain with the Law Firm:
advising him his matter would be assigned to Mr. Lyons and then
switching it to Mr. Hallen, a much more junior and, according to Mr. Aduna,
far less competent lawyer.
[39]
Conversely, in his submissions related to the factors enumerated in s. 71(4)
of the Act and which I must consider in determining the appropriate fees
he should pay to the Law Firm, Mr. Aduna said that the matter required
little in the way of skill and that it ought to have been capable of being
handled by a junior lawyer, just starting out. He also submitted that, as, in
the end, the Law Firm forced him not to go to trial, there was no special
skill, knowledge or responsibility required of or placed on Mr. Hallen, the
lawyer who did most of the work.
[40]
Mr. Murray submitted that, after the file was transferred from Mr. Lyons
to Mr. Hallen, the Client did not complain to Mr. Lyons or Mr. Petrovic
(the case manager with whom he had the most contact) about Mr. Hallens
work. Nor did Mr. Aduna ask that his file be returned to Mr. Lyons
or assigned to another, more senior, lawyer. Consequently, Mr. Murray
submitted that Mr. Aduna should not (and cannot) now complain about the
manner in which Mr. Hallen handled this matter.
[41]
Regardless, Mr. Murray suggested that there is no evidence before
me that Mr. Aduna was not well-served by Mr. Hallen.
[42]
Mr. Aduna was very critical during the hearing about Mr. Hallens
conduct of his matter and even more particularly about Mr. Hallens
conduct during this hearing. Specifically, Mr. Aduna insisted that Mr. Hallen
was, in respect of several issues, untruthful during his direct evidence and on
cross-examination by Mr. Aduna.
[43]
When I cautioned Mr. Aduna about making such serious allegations
against Mr. Hallen, Mr. Aduna proceeded to reiterate those
allegations and became even more entrenched in his position that Mr. Hallen
was, and must be found by me to be, a liar. Because this allegation of
untruthfulness occupied a great deal of time in Mr. Adunas submissions and
because I was concerned with the allegations, I ordered a transcript of Mr. Adunas
cross-examination of Mr. Hallen.
[44]
In his submissions, Mr. Aduna insisted that Mr. Hallen placed
him under considerable economic distress by threatening to withdraw if Mr. Aduna
did not agree to settlement on the basis of a formal offer; by suggesting that
he (Hallen) would have Mrs. Aduna appointed as Mr. Adunas committee
or litigation guardian if the Client did not agree to a settlement; and by
insisting that to be clean in relation to the trial, the Law Firm would
insist on taking Mr. Adunas Honda Odyssey van from him as collateral for their
fees.
[45]
In responding to Mr. Adunas queries about these specific issues,
Mr. Hallen gave measured and considered answers. He did not specifically deny
the allegations. Instead, he said that he could not recall the specifics of the
alleged conversations and, further, that he was not likely to have said some
the things suggested.
[46]
It is illustrative to reproduce here a few of these exchanges between
Mr. Aduna and Mr. Hallen.
[47]
The first relates to Mr. Adunas allegation that Mr. Hallen
sought to secure their trial fees by taking security over Mr. Adunas vehicle. On
January 8, 2013, in cross-examining Mr. Hallen about a telephone
conversation between them just before the mediation, Mr. Aduna posed the
following questions to Mr. Hallen and received the following answers (Excerpt
from Proceedings in Chambers – Cross-Examination of Manjot Hallen, Page 36,
Lines 21 – 46):
Q Do you remember that you have a new plan? You
told me that youre going to — youre going to — if I want to — if I want to
go to the nine-day trial, you want to be clean, the word clean, before going
to the nine — nine-days trial. Do you remember that word?
A I — I dont remember saying it.
Q Okay, thats fine.
A It doesnt sound like something I would say
in practice.
Q Okay. You asked — do you remember asking me
is I own a property on April 20th, 2011?
A On April 20th?
Q Yes.
A No, but I remember having conversations with
you about — you had multiple questions for me about what could happen if costs
are assessed against me, and what does it mean, what can ICBC come after, and,
you know, you had multiple questions about that, and I remember talking about
getting far deeper than I wanted to with you about — about what ICBCs
recourse could be. I remember that at the mediation, but not — but not —
Q Before that, you called me on the telephone. You
dont remember that.
A I dont remember
that.
[48]
And at page 37, line 36 to Page 38, Line 2 of the January 8, 2013
transcript, Mr. Hallen was asked the following questions and gave the
following answers:
Q Do you remember before the mediation that you
told me that if — if — if we can — if I want to go to the nine-day trial, we
have to — we have to sell or acquire the — my 2000 Honda Odyssey? Do you —
A I — okay, the only way I can answer that is
I dont remember, and it just sounds like something I would not say in my practice.
Q Do you remember that I told you that its
$20,000, the — do you remember that?
A Again, the question is do I remember it. I —
I dont remember that, no.
Q You told me — do you remember that you told
me that the — the proceeds will pay for everything, for the trial and the
previous expenses? Do you remember that?
A Mr. Aduna, I have never attempted to take
some kind of a down payment from any of my clients in advance of going to
trial, and it seems like thats what youre suggesting. And I certainly did not
do that in this case.
Q So you —
A And I wouldnt do that.
Q So you — you deny — deny that conversation.
A Well, I dont remember it, but it just — it
sounds like — it doesnt sound like me, so I — thats all I can say to you. If
— if I could remember the conversation — a conversation, I could deny it,
but I dont remember a conversation.
Q Mm-hmm.
A And the things
youre saying to me just — they sound preposterous to me.
[49]
When asked if he had threatened to quit the case and have Mr. Adunas
wife appointed as his guardian if Mr. Aduna did not take ICBCs formal
offer to settle (of $200,000), Mr. Hallen stated that he did not remember
threatening to quit and that such a suggestion sounds ridiculous. In respect
of the appointment of a litigation guardian, Mr. Hallen had this to say (Excerpt
from Proceedings in Chambers – Cross-Examination of Manjot Hallen January 7,
2013, page 20, lines 17 – 32):
Q Okay. You want to hear another sound
ridiculous? If you think its ridiculous, that what you told me. You said, is
it true or not, youre going to declare me incompetent. Youre going to ask the
court to declare me incompetent and put — and [indiscernible] my inalienable
rights and put my four-month wife — my wife, who was pregnant at that time, in
charge. Do you remember that, yes or no?
A Okay, this, unfortunately requires a bit of
an explanation on my side, so I have to give you —
Q Did you ever say that to me?
A I — heres what I said to you. You said to
me that you were — you, by yourself, said, Im not sure if I can give you
proper instructions. My — my instant response to that is I was concerned if
you said you couldnt give instructions, and I said, I dont — I dont agree
that youre in a position to no longer give me instructions, but if you are,
there is a procedure that we can follow. And I would have said to you that I
dont think we need to travel down that road —
TITO ADUNA: Excuse me —
A — because I
dont have medical evidence to suggest that.
[50]
I have no doubt that Mr. Hallen strongly urged Mr. Aduna to
accept the final offer made at the mediation. It was his job to assess the
strength of the Clients case and how the Client was likely to be perceived at
trial. Mr. Hallen testified that he was somewhat apprehensive about how
Mr. Aduna might be perceived at trial and, on that basis, felt that it was
in Mr. Adunas best interests to settle the matter at mediation. In fact,
Mr. Hallen testified that the mediator also expressed concerns to him
about Mr. Adunas ability to be perceived sympathetically by the jury
based on Mr. Adunas conduct at the mediation.
[51]
I believe that Mr. Aduna did suggest to Mr. Hallen he was
unable to give him proper instructions and, hearing that, Mr. Hallen advised
Mr. Aduna that, if he [Aduna] was not able to provide instructions to the
Law Firm, an option would be to make an application to appoint Mrs. Aduna
as Mr. Adunas litigation guardian. I find that this was not put to Mr. Aduna
as a threat but, rather, was proper advice given by counsel to a client
expressing discomfort about providing counsel with instructions.
[52]
As for the question of Mr. Adunas vehicle, Mr. Hallen
testified that he had conversations with Mr. Aduna about the costs
consequences of not accepting the formal offer (at $200,000). Those
conversations no doubt included the information that, if Mr. Adunas only
asset was his vehicle and he somehow ended up owing ICBC costs (because he
failed to beat the formal offer at trial), it might be open to ICBC to attempt
to seize that vehicle to collect on those costs.
[53]
There is no evidence to support Mr. Adunas repeated submission
that Mr. Hallen was untruthful in his testimony. During his direct
testimony and his cross-examination, Mr. Hallen conducted himself in a
straightforward and forthright manner. He responded to the questions posed
candidly and with little in the way of embellishment. When asked to confirm or
deny allegations of which he had little or no recall, Mr. Hallen responded
appropriately by stating that he had no direct recollection. His comments such
as It doesnt sound like something I would say; or Its not my practice to
had the ring of truth. Mr. Hallen did not get angry or frustrated by Mr. Adunas
allegations nor by being asked the same questions over and over again (although
framed in a variety of ways). He kept his cool. His responses never wavered. All
in all I found him to be a credible and reliable witness.
[54]
Mr. Aduna also complained that the Law Firm failed in its
obligations to him by not securing the services of an expert economist early in
the litigation. Mr. Aduna told me that he was not able to consider any
offers made unless he was able to fully understand his economic losses and that
to do so he needed to see an economists opinion about such losses. Mr. Aduna
insisted that he regularly asked both Mr. Petrovic and Mr. Hallen to
retain an economist but no economist was retained until shortly before the
mediation.
[55]
Neither Mr. Petrovic nor Mr. Hallen was able to specifically
recall any requests by Mr. Aduna to engage the services of an economist
early on in the litigation. The first mention of an economist in the materials
before me was an email from Mr. Aduna to Mr. Petrovic dated February
15, 2011 wherein Mr. Aduna specifically notes:
5) Should we hire an
Economist ASAP to accurately value my claim?
[56]
In reply, Mr. Petrovic says:
There is no rush regarding the
economist – closer to trail e will have mother documentation anyway. [all sic].
[57]
I assume Mr. Petrovic meant to say:
There is no rush regarding the
economist – closer to trial we will have more documentation anyway.
[58]
At the time these emails were exchanged, the trial was set for June 28,
2011 for five days. The email from Mr. Aduna does not mention previous
requests to hire an economist, something Mr. Aduna insisted that he had
pressed for on several occasions since the beginning of his case. If he had
made such requests, I would have expected his email to refer to them. It did
not.
[59]
Defence counsel obtained an Economic Legal Report from Robert MacKay, B.
Comm, CA-IFA, CBV on March 24, 2011. That report was served on the Law Firm by
letter from opposing counsel on that same date. On April 8, 2011, the Law Firm
retained Mr. Darren Benning of PETA Consultants to provide a report on Mr. Adunas
past and future loss of income. Mr. Bennings report was received on
April 14, 2011, about a week before the mediation at which the matter settled
took place. I expect that Mr. Bennings report was ordered to be
available to counsel for reference at the mediation.
[60]
I agree with Mr. Petrovics comment in his email in response to Mr. Aduna
that it would be more appropriate to wait until closer to the trial to retain
the services of an economist. I regularly assess bills of costs in motor
vehicle accident cases. In many of those cases where the services of an
economist are engaged, those services are not engaged until quite close to the
trial as the most appropriate time to determine a plaintiffs lost income (both
past and future) is as close to the trial as possible as that is when the
losses have been most clearly crystallised. I can find no fault with the fact
that an economist was not retained until it was necessary both to rebut the
report prepared by the defense expert but also to assist in putting forth the Clients
case at mediation.
[61]
As for Mr. Aduna complaint about the Law Firms alleged bait and
switch tactic, Mr. Aduna made no complaint to Mr. Petrovic (with
whom he had very regular contact) about Mr. Hallens assignment as his
lead counsel. Nor it appears did Mr. Aduna complain to Mr. Lyons
or to Mr. Hallen himself about it. Mr. Hallen met with Mr. Aduna
and prepared him for his examinations for discovery and for the mediation. If,
at any time, Mr. Aduna was unhappy with Mr. Hallen, he had more than
ample opportunity to express his dissatisfaction and request that his file be
given back to Mr. Lyons or another lawyer more senior to Mr. Hallen. I
do not find that Mr. Aduna was in any way disadvantaged by the assignment
of his case to Mr. Hallen.
[62]
Mr. Aduna also suggested that Mr. Hallen did not properly
serve him during the mediation. He suggested that Mr. Hallen was texting
or emailing with counsel for the defendant and/or persons at his office during
the mediation, including while actively engaged in the mediation. Mr. Hallen
agreed that sometimes he might have discussions with opposing counsel without a
client present but stated said that he would never have texted or emailed with
opposing counsel during a mediation and that he did not do so here. He
testified that, on occasion, during downtime in a mediation, he might take
out his Blackberry and review his emails and respond to one or two of them. He
also said that, although he has no direct or specific recollection of doing so
during the Aduna mediation, sometimes he calls someone at his office to discuss
tactics, offers and the like with those others to receive a second opinion
about a case.
[63]
I found Mr. Hallens comments and explanations as to what likely
occurred here to be believable. I believe Mr. Hallens assurance that he
would not have (and did not) engage in any ex parte communications (texts
or emails) with opposing counsel during the Aduna mediation. Further, if Mr. Hallen
did review his emails and/or call his office during breaks in the mediation (i.e.
while the mediator was caucusing with the defendant), his actions would be
considered to be entirely appropriate. There is no prohibition against counsel
using downtime during a mediation to review emails or texts; nor to call back
to his office to receive phone messages or the like. Further, one of the
benefits of retaining counsel who works in a firm environment (rather than a
sole practitioner) is that the collective wisdom of others in the office is
available when a second opinion might come in handy.
[64]
While certain other of Mr. Adunas complaints may not, strictly
speaking, go to the skill, specialised knowledge or responsibility required
of counsel, this is an appropriate point in these reasons to deal with them. During
Mr. Hallens testimony, Mr. Aduna raised an issue with the transcript
of his examination for discovery. At his examination for discovery, Mr. Aduna
apparently spoke of a volleyball accident he suffered (before the Accident). The
transcript, rather than using the word volleyball, used the word Volvo. Mr. Aduna
was very critical of Mr. Hallen who apparently did not, himself, discover
the error in the transcript and was not aware of it until Mr. Aduna
pointed it out to him. Once Mr. Aduna pointed out the error to Mr. Hallen,
he arranged to have the transcript corrected.
[65]
In my view, no fault can be placed at Mr. Hallens feet for this
error. It is not an effective use of counsels time to scrutinise a discovery
transcript on a word by word basis. The reason a transcript is sent to a
client is so that the client may review it to ensure accuracy. The client is the
person most intimately familiar with his own evidence. It is particularly
important for clients who may speak accented English (as does Mr. Aduna)
to review their transcripts to ensure accuracy.
[66]
Although he did not mention it specifically in his submissions, on
cross-examination of Mr. Hallen, Mr. Aduna suggested that Mr. Hallen
was in error in not retaining a neurologist or neurosurgeon as an expert in
this matter. Mr. Hallen steadfastly assured Mr. Aduna that the
experts that were retained (Drs. Anderson, Hershler, and Griffin) were
well qualified to (and did) give opinions regarding Mr. Adunas injuries,
including diagnosing him with PTSD and further in determining if Mr. Aduna
had suffered any sort of brain injury, including an MTBI (which none of the
experts diagnosed).
[67]
In reviewing a lawyers bill under the Act it is not appropriate
that I second guess each and every decision made by counsel. As noted by
Master Joyce (as Registrar), as he then was, in D. Brent Adair Law Personal
Corp. v. Warren, [1996] B.C.J. No. 2818:
[22] Mr. Warren is critical
of Mr. Adair’s preparation for and conduct of the application. He suggests that
if Mr. Adair had done a more thorough job the result might have been different.
It is easy to be critical with the benefit of hindsight. Counsel’s job is to
present the case, to the best of his ability, in the manner in which he
believes will be the most persuasive for the client. In doing so he is required
to exercise his judgment as counsel in determining what evidence to tender in
favour of his case, the extent and manner in which his opponent’s case ought to
be attacked and the emphasis to be given to particular facts and to particular
propositions of law. In my view a registrar, conducting a review under the
Legal Profession Act, should be cautious about reducing a lawyer’s bill on the
basis that some other lawyer might have conducted the case somewhat differently
perhaps with different results.
[68]
Mr. Aduna appears to wish me to decide that it was an error for Mr. Hallen
not to engage the services of a neurologist or neurosurgeon (or, for that
matter not to have sooner engaged the services of an economist). He appears to
be suggesting that, had Mr. Hallen taken a different tact, the results
would have been more favourable for him. Mr. Aduna also insisted that he
needed seven figures in his settlement to return him to his pre-accident
position. However, there is no evidence before me (other than Mr. Adunas
conjecture) that Mr. Hallens decisions in how to best prosecute Mr. Adunas
case were, in any way, faulty or flawed.
[69]
I cannot say that the settlement achieved was not appropriate in the
circumstances. Mr. Hallens assessment of the Clients damages appears to
be that the matter was worth at least $100,000 but not more than the $300,000
the matter settled for. The fact that Mr. Hallen recommended that Mr. Aduna
strongly consider the defendants $250,000 offer at mediation is indicative of
the amount at stake.
[70]
Mr. Hallen testified that he went to the mediation because he
believed the defendant would increase their $200,000 former offer. Even so, I
believe that there was a real and substantial risk to Mr. Aduna that he
would not beat that formal offer at trial and would have then been liable to
pay the defendants costs of, at the very least, the trial. That was a
significant danger faced by Mr. Aduna. His expectations and assessment of
his own claim are, in my view, quite unrealistic. Those unrealistic
expectations had to be managed by Mr. Hallen (and, to some extent, Mr. Petrovic).
[71]
The solicitors were tasked with the responsibility of pursuing legal
remedies that would allow Mr. Aduna to be paid appropriate damages for the
injuries he suffered at the hands of the defendant: to try, as best as
possible, to return him (through the payment of damages) to his pre-accident
position. Some specialized knowledge and experience in motor vehicle accident
matters was required. Certainly Mr. Osborne and Mr. Lyons were well
experienced in prosecuting like matters on behalf of plaintiffs. Mr. Petrovic,
as case manager, brought a unique skill-set to the matter having been called to
the bar in his home country of Yugoslavia and because of his work as a case
manager for the Law Firm for some 11 and a half years. Certainly the Client
would have benefited from Mr. Petrovics experience in like matters. As
for Mr. Hallen, during his testimony, he demonstrated to me a suitable knowledge
of this area of law. He also, as noted, appropriately advised the Client what
damages he might expect to receive and engaged a number of experts who each provided
reports that would bolster the Clients case.
C. The Lawyer’s Character and Standing in the Profession
[72]
This was not specifically raised as an issue in this review. All of the
lawyers who worked on this matter have, as noted, broad experience in
plaintiffs personal injury matters and, to the best of my knowledge, all are (and
were during the currency of the retainer) members in good standing of the Law
Society of British Columbia.
D. Amount Involved
[73]
The solicitors achieved a settlement of $300,000, plus taxable costs and
disbursements for the client.
[74]
Mr. Aduna submitted that the amount achieved was grossly inadequate
given that he, his wife and four children reside in Vancouver, a very expensive
city in which to live and raise a family. He says that the solicitors reached
their goal in this action — they received significant fees — while he, the Client
remains, and will continue to remain, poor.
[75]
As I said earlier in these reasons, it is not my role on a review of a
lawyers bill to become, essentially, the adjudicator of the matter and to
decide, or even opine on, what might have happened had this case proceeded to
trial. The matter settled for $300,000, plus costs and disbursements. Mr. Aduna
gave instructions to his counsel to settle it for that amount and he signed a
release. That amount ($300,000) must be said to the the amount involved.
E. The Time Reasonably Spent
[76]
Both Mr. Petrovic and Mr. Hallen testified that they do not,
as a matter of course, record the time they spend on clients matters. For
this hearing, each of them reviewed Mr. Adunas file and estimated the
time he spent on it. Mr. Petrovics testimony was that he spent some 200
hours on the matter and Mr. Hallen said that, conservatively, he spent 65
to 75 hours on the file between early 2009 (when he took over from Mr. Lyons)
and the mediation (in April 2011). No doubt Mr. Osborne spent some time
on the file in the time he was the lawyer in charge of prosecuting it on the
Clients behalf. Mr. Lyons time was likely minimal as he was the
responsible lawyer for only a very short period of time.
[77]
Mr. Aduna says that Mr. Hallens and Mr. Petrovics
estimates are unreasonable and way, way, way overboard. He suggested that,
at most, Mr. Hallen spent only approximately 32 hours on his file which
he, generously he says, calculated using 8 hours a day for each of the three days
of examinations for discovery and another 8 hours for the day spent at
mediation.
[78]
Messrs. Hallen and Petrovic both testified that this matter was
document intensive. There were a large number of medical records (between 30
and 40 sets) that had to be assembled for each of the medical professionals
retained as experts on the Clients behalf. In addition to retaining the
medical experts, the Law Firm commissioned a vocational assessment of the Client
and obtained the opinion from Mr. Benning, the economist. Records had to
be assembled and sent to each of the experts retained. And, once the reports
were received from those experts, they had to be reviewed and considered in the
context of the case.
[79]
The Client made a number of requests to be reimbursed his special
damages. Each of these requests involved receiving and compiling documents from
Mr. Aduna to be sent to ICBC for reimbursement. Mr. Aduna supplied
voluminous business records, all of which required review; as well as his
income tax records for several years pre-accident which were needed to
establish his past income losses.
[80]
The matter was originally in fast track but taken out of that Rule and
set for a nine day jury trial to commence in June 2011. Some trial preparation
was started when the matter settled, including a notice to admit. Mr. Hallen
had begun to develop a case plan for use at mediation and trial.
[81]
While there were no interim or interlocutory motions, there were three
examinations for discovery and two mediations one early on in the action and
the final, successful, mediation in April 2011. The lawyers had to prepare for
each of those. Several offers were exchanged, starting with the defendants
initial offer of $5,000 very early on in the litigation. Each had to be
considered and reviewed with the Client.
[82]
In addition, there were ongoing telephone calls with the Client and
substantial email communications between the Client and, particularly, Mr. Petrovic.
[83]
In my view, the time estimates provided by each of Messrs. Hallen
and Petrovic are within the range of the number of hours I would expect to see
recorded to a matter such as this. I do not agree with the Clients submissions
that these estimates were excessive.
F. Agreement as to Fees on an Hourly Rate Basis
[84]
This was not a matter where the parties had an agreement for fees to be
billed on the basis of hourly rates.
G. Importance of the Matter to the Client
[85]
In his submissions the Client confirmed that this matter was of the
utmost importance to him. The Accident was responsible for him losing his
income and his passion for work (as a graphic designer) which he loved.
H. Result Obtained
[86]
The Law Firm submits that they achieved an excellent result for Mr. Aduna.
They shifted the defendant from an initial formal offer to settle of $5,000 in
2006, to $200,000 in 2011 and achieved a final settlement for the Client at
mediation of $300,000 plus taxable costs and disbursements (and in respect of
costs, they were able to secure the agreement of the defendant to pay almost
100% of the disbursements incurred on the Clients behalf). The Law Firm
submits that Mr. Aduna has failed to produce any evidence on this hearing
that those results are lacking or that its performance was poor.
[87]
The Client on the other hand submits that he has been left devastated
and destitute as a result of the Law Firms failure to achieve a much better
result for him. In fact, at one point in his submissions he told me that he had
been a victim in the Accident and now was being victimised by his lawyers
that he was like a wounded wildebeest in the African Savannah being chased by
Lyons.
[88]
Most of Mr. Adunas submissions on this factor focussed on cases
where the plaintiff had achieved significant monetary awards. He insists that
he was forced to settle by Mr. Hallens threat to withdraw; appoint his
pregnant wife as his litigation guardian; and take his Honda Odyssey vehicle as
collateral to be clean to go to trial.
[89]
I cannot find in favour of Mr. Aduna in respect of any of these
submissions. He was, in my view, satisfactorily served by his counsel. He was
urged to take a settlement that was actually much higher than the low end of
the value Mr. Hallen placed on the case. The settlement achieved was
appropriate and in the Clients best interests. All in all the results were
favourable for the Client.
I. All of the Circumstances
[90]
Section 71(4) of the Act says that in deciding on the appropriate
fee, I must consider all of the circumstances including (but not limited to)
the factors already enumerated and reflected on by me in these reasons.
[91]
The phrase all of the circumstances has been held to mean all factors
essential to justice and fair play: Diligenti v. McAlpine, Roberts and
Poulus (1978), 9 B.C.L.R. 153 (C.A.), at p. 156; and Yule v. City of
Saskatoon, (1955), 16 W.W.R. 305 (Sask, Q.B.), affd 17 W.W.R 296 Yule. I
am therefore not limited to the factors enumerated in the Act in
determining a fair fee.
[92]
Additional factors that have been considered relevant to a review of a
lawyers bill under the Act are:
a) The
risk that the lawyer undertook in agreeing to represent the client on the basis
of a contingent fee arrangement: Eberhardt, Caplan, LaCroix & Silverman
v. Goode (1987), 11 B.C.L.R. (2d) 112 (C.A.); and
b) The
nature of the client: Montaine Black & Co. v. Osadchuk, [1985]
B.C.J. No 1906 (C.A.) [Montaine Black];
c) The
ability of the client to pay his legal fees: Norton, Stewart & Scarlett
v. Mercier Estate (1989), 40 B.C.L.R. (2d) 168 (C.A.);
d) Although
not determinative, the terms of any agreement between the lawyers and their
client regarding the payment of fees: Act, s. 71(5) and Mide-Wilson
v. Hungerford Tomyn Lawrenson and Nichols, 2013 BCSC 374.
a) Risk
[93]
As for the risk the Law Firm took, it is true that the retainer
agreement between the parties was that the Law Firm would act for the Client on
the basis of a contingency fee: i.e., they would be paid nothing for
their efforts if the Client received nothing at trial. There was, however,
little risk of non-payment if this matter proceeded to trial as, despite the
fact that liability for the Accident was denied, Mr. Petrovic was a witness
to the Accident and he would have been able to testify as to the circumstances
of it. Mr. Petrovic apparently was of the view that the defence was not
likely to succeed in denying liability.
[94]
I should note, however, that there was (as there always is with any
contingency fee arrangement) some risk of non-payment if the Client terminated
the retainer before the matter concluded and decided to take his legal business
elsewhere.
[95]
Moreover, the Law Firm risked the costs of the disbursements they
incurred on the Clients behalf or, at least certainly, they bore the burden of
carrying the costs of them for the life of the Action which in this case was
not insubstantial as the Clients injuries were complex and did not resolve quickly
after the Accident. It was five years from the date of the Accident until
resolution by settlement at mediation.
b) Nature of the Client
[96]
As for the nature of the client, the issue in Montaine Black
was whether it was appropriate for a judge, in deciding on an appropriate fee
for a solicitor, to take into account his conclusion that the client in
question was difficult. Taggart J.A. held, at paras. 33-34:
I think the judge was quite entitled to take into account the
fact that the appellant was a difficult client. The judge reached that
conclusion not only on the basis of the evidence adduced before him, but on the
basis of his opportunity to observe the appellant during the time that she was
giving testimony.
The fact that a client provides
difficulties for the solicitor having the conduct of her affairs is, in my
view, relevant if for no other reason than that such difficulties make for
considerably more work on the part of the solicitor. I think there is no merit
in that third ground.
[97]
Mr. Aduna is a very intelligent and capable person and the Accident
was devastating for him. Unfortunately, he has become overinvested in the
litigation and is seemingly unable to be objective about his expectations which
were unrealistic and had to be managed by Messrs. Hallen and Petrovic.
[98]
That he was overinvested was clear from the way he dealt with this
hearing. For example, he insisted that Mr. Hallen was a liar, despite
being warned by me that to make an allegation such as that, if proven to be
unfounded, could result in an award of special costs against him. On hearing
that advice he became even more insistent and adamant in making that allegation.
As noted, Mr. Aduna perceives himself as a victim of the Accident and
of his counsel and he gives his counsel no credit whatsoever for any of the
work that they did. He even submitted that they should pay him the costs of
disbursements he says were not necessary or proper to prosecute his matter
despite having been (almost) fully compensated for them by the defendant as
part of his taxable costs and disbursements at the mediation.
[99]
Mr. Aduna had many, many questions about the litigation, how to
conduct himself at his examinations for discovery, the IMEs he was sent on,
and at the mediation. He said he was overwhelmed by the litigation and even
told Mr. Hallen that he wasnt sure he could provide him with appropriate
instructions. All of this contributed to the attention the lawyers and Mr. Petrovic
had to pay to the Client and to the litigation.
c) Clients Ability to Pay/Terms of the Fee
Agreement
[100] I will
deal with these two considerations together as, to some extent, they overlap.
[101] The Client
says he has been completely exhausted financially by the Accident, the
litigation and the Law Firm. During the hearing he suggested that he incurred
$100,000 in debt from the date of the Accident to the date of the mediation.
[102] As noted
earlier, the Law Firm agreed to represent the Client on the basis of a
contingency fee. Contingency fee arrangements were introduced in this province
for a reason: so that parties with limited means could have access to justice
without having to risk all of their assets on legal fees.
[103] While I
previously set aside the CFA as unfair, I did so because Mr. Aduna was not
given the benefit of speaking to a lawyer at the Law Firm when he signed that
agreement. I did not find that the Client lacked capacity to sign the CFA. Nor
did I find that the Law Firm deliberately took advantage of the Client or that
the terms of the CFA were designed to defeat the Clients objectives. I also
did not hold that a contingent arrangement was an inappropriate way for the Law
Firm to be compensated. In my view the fact that the Client chose to enter
into a contingency fee retainer arrangement with the Law Firm is some evidence
that he was not in a position to enter into a retainer agreement with the Law
Firm whereby he would pay them periodically for work done on his behalf.
[104] It is
likely that the very reason Mr. Aduna entered into the CFA with the Law
Firm was because he did not have, at the time he signed that contract, the
ability to pay the Law Firm a fee on the basis of an hourly rate retainer. He
had no way of knowing, at the moment he signed the CFA, the extent of his
injuries, how long he would be off work, or how he would provide for his family
in the interim between the Accident and settlement or trial.
[105] The fee
under the CFA was to be 29% of the damages to be paid to Mr. Aduna. When
he sent the Initial Bill, Mr. Hallen reduced that percentage to 25% and
billed the client $75,000 (25% of the $300,000 settlement amount).
CONCLUSION
[106] All of the
above factors must be taken into account by the registrar on this review. However,
at the end of the day, the fee allowed the Law Firm must be commensurate to the
work performed and proportionate to the amount involved.
[107]
In McQuarrie Hunter v. Parpatt, 2011 BCSC 800, Registrar Cameron
confirmed that fees payable under a contingency fee must in certain
circumstances be reduced to maintain the integrity of the profession. In that
case the contingency fee contract generated a fee more than double the time
spent on a matter. Registrar Cameron reduced the premium to approximately 100%
of the time spent. He reasoned at para. 74:
To ensure integrity it is
clearly not always necessary or appropriate to factor out any premium payment
to a law firm resulting from a comparison between the CFA and a notional hourly
rate bill but there is point when the differential requires an adjustment to
maintain integrity. I consider this case to be one for such an adjustment.
[108] Even
though I set aside the CFA and am now dealing with a quantum meruit
assessment, the fees allowed must not be so high as to bring the integrity of
the legal profession into disrepute. I expect to some extent, knowledge of
that fact caused the Law Firm to issue the Second Bill and reduce the fees
sought to $60,000 from $75,000.
[109] When I
asked Mr. Aduna what he felt a fair fee would be, he indicated that as
Mr. Hallen seemingly wanted to take his $20,000 Honda Odyssey van as
collateral for the Law Firms fees (which suggestion was not supported by the
evidence), he (Aduna) would agree that $20,000 seemed about right, inclusive
of fees, taxes and disbursements.
[110] While I am
not a fan of strict billings on the basis of hours times hourly rates
(solicitors ought not to be mesmerised by the ticking clock: Re Solicitor
[1971], 3 O.R. 470 at 472), if I take Mr. Hallens time on this matter (65
hours at the low end) and multiply that by $250 per hour a conservative
hourly rate for someone with his level of call to the bar, I would arrive at
some $16,250 in fees. Mr. Petrovics time similarly expanded (200 hours
times $150 per hour) would give another $30,000 in legal fees on a time basis
for total hourly fees of $46,250 on the conservative end of things. That, of
course, does not take into account any time spent by Mr. Osborne or Mr. Lyons.
It only takes into account hours times a potential (and conservative) hourly
rate. It gives no consideration to all of the circumstances, something I
must consider.
[111] Taking all
of the factors into account, I find that a fair fee for the necessary and
proper work performed in this retainer is $60,000, the amount the Law Firm seeks
in fees on the Second Bill.
[112] I have allowed
the Law Firms fees at $60,000. The disbursements are allowed as presented. With
the addition of applicable taxes, the bill is allowed at $93,318.48.
COSTS
[113] I have
upheld the Final Bill as presented. Therefore, absent special circumstances,
the Law Firm is entitled to its costs, at Scale B, for this review: s. 72(1)
of the Act.
[114] During the
hearing, I warned Mr. Aduna that if he persisted in making allegations
against Mr. Hallen that were not supported on the evidence, I might order
that he pay the Law Firms special costs of this hearing. During his final
submissions Mr. Murray urged me to make such as order.
[115] An award
of special costs requires "reprehensible" conduct which may be
defined as conduct that is scandalous or outrageous but also includes milder
forms of misconduct deserving of reproof or rebuke: Garcia v. Crestbrook
Forest Industries Ltd. (1994), 119 D.L.R. (4th) 740; 45 B.C.A.C. 222
(B.C.C.A.). Mr. Adunas conduct was certainly deserving of rebuke (in
fact it invoked rebuke from me during the hearing). However, that being said,
while the Law Firm has been successful on this review (of the Final Bill), Mr. Aduna
was successful on the first part of this hearing: the examination of the CFA. So,
while the Law Firm is entitled to its costs on this second part of this matter,
Mr. Aduna would be entitled to his costs of the first part.
[116]
In my view, the issue of the fairness and reasonableness of the CFA
occupied about one-half of the time spent on the evidence in the hearing and,
by far, the majority of the parties submissions. Therefore, while Mr. Adunas
right for costs is likely greater than those of the Law Firm, considering his
conduct during the hearing, I find that it is most appropriate that each party
bear their own costs of this proceeding and I so order.
Registrar
Sainty
[1]
While, technically, there was no bill of costs for me to
review in this matter, it was clear to me at the hearing that what Mr. Aduna
meant by seeking this relief was a review of the disbursements he was charged
by the Law Firm as listed on the Initial Bill.
[2]
At the time the matter was settled, HST was assessed and paid
on all legal fees and thus, per Rule 14-1(8) of the Supreme Court Civil Rules,
tax at that amount was payable on the tariff costs.